In defence of litigation funding

The Association of Litigation Funders of England & Wales, which I chair, is tasked by the Civil Justice Council with the voluntary regulation of litigation funding.

 The association’s seven funder members comprise the overwhelming majority of litigation funders active in the UK market. They submit themselves to the association’s Code of Conduct and complaints procedure.

The association is sometimes described as low-profile, which the board takes as a compliment and is testimony to the progress being made by litigation funders here to establish their businesses on a basis that is supported and encouraged by the courts, and by users and their lawyers.

The costs of securing access to justice are soaring everywhere, further entrenching the advantages of big business in litigation. This endangers the fundamental principle of the right to a fair trial of civil proceedings, of which equality of arms is an essential part.  

Currently, public policy here and elsewhere is not to place obstacles in front of people who have been wronged from availing themselves of financial assistance, where that assistance does not infringe other public policy principles. It is on the basis of this fundamental principle that litigation funding justifies its existence.

The US Chamber of Commerce is the world’s largest lobbying organisation and the mouthpiece of global big business – its members are generically on the defendant side of litigation. Through its two clones, the oxymoronically named Institute for Legal Reform and Justice Not Profit, big business in the US is running an expensive campaign against litigation funding.

The US chamber’s latest retained spinners are Westbourne Communications (‘a communications agency that specialises in changing opinions that matter to your business’). It has taken over from Fleishman-Hilliard (‘award-winning, smart solutions to complex communications challenges’).

Westbourne has produced for its client a survey that purports to establish that members of the public are becoming concerned about litigation funding in England and Wales. Alongside this, websites are deployed featuring video case studies of what is described as ‘Lawsuit Abuse’. Unsurprisingly, the examples are overwhelmingly taken from that Chamber of Litigation Horrors in the US’s own backyard – my personal favourite being the guy from Batavia, Illinois, whose invention of a ‘kitty litter scoop’ is, apparently, threatened by litigation.

Contrary to the US chamber’s view, attitudes are evolving towards acceptance and even encouragement of litigation funding as an important means of securing access to justice. This is true in the UK, Australia, Canada, New Zealand, Jersey and other offshore jurisdictions, and now, prospectively, in Hong Kong and Singapore. In the civil law jurisdictions of Europe, litigation funding is completely accepted.  

The subject took up just eight pages of the Jackson Report.  However, that was enough for Sir Rupert to bestow a generous blessing on litigation funding, which he saw as ‘beneficial’ because it promoted access to justice without imposing financial burdens on defendants, and filtered out unmeritorious cases.

Moreover, litigation funders are finding increasing numbers of large-scale, unquestionably solvent businesses taking up litigation funding as a rational commercial response to the challenge of managing the financial and other risks of litigation.

Does the US chamber not have enough legal lobbying to do at home? Given the many evils of US litigation culture, including triple and punitive damages, contingent fees, opt-out class actions and the absence of adverse costs risk, one can only wonder why the organisation has appointed itself the guardian of UK litigation virtue.

Leslie Perrin is chairman of the Association of Litigation Funders of England & Wales. He is also chairman of Calunius Capital LLP and senior independent director of DAS UK Legal Expenses Insurance Group. He was formerly senior partner of Osborne Clarke